WEBVTT - The Tariff Lie: Why Everything You’ve Been Told Is Wrong 0:00:00.200 --> 0:00:03.480 They say tariffs are the worst economic policies ever, and 0:00:03.680 --> 0:00:06.960 for lots of reasons. But what if that's the biggest 0:00:07.000 --> 0:00:10.480 lie in modern economics. They told you tariffs are just 0:00:10.520 --> 0:00:13.360 a tax on you. They say they start trade wars. 0:00:13.600 --> 0:00:16.120 They say that making stuff in America means that you're 0:00:16.160 --> 0:00:17.480 going to pay ten times more. 0:00:17.520 --> 0:00:19.639 But what if none of that's true. 0:00:19.880 --> 0:00:23.200 Because if they're wrong, we've built our economy on a myth. 0:00:23.440 --> 0:00:26.640 We've handled our power to countries that don't play fair. Now, 0:00:26.680 --> 0:00:29.160 I've spent years studying this and talking about this and 0:00:29.200 --> 0:00:33.320 speaking around the world about history cycles and what actually works. 0:00:33.479 --> 0:00:36.600 And in this video, I'm going myth by myth to 0:00:36.680 --> 0:00:39.199 show you what they don't want you to see. So 0:00:39.320 --> 0:00:42.879 let's go, all right, We're going to jump right through this, 0:00:43.000 --> 0:00:45.200 go through the biggest myths that you've heard. 0:00:45.240 --> 0:00:47.720 Now, why are they myths and why are they not real? 0:00:47.840 --> 0:00:50.320 Well, the main reason why is these myths are being 0:00:50.360 --> 0:00:54.840 pushed by academics. They're being pushed by theories that sound 0:00:54.880 --> 0:00:58.000 really good on paper, but they're not in the real world. Now, 0:00:58.080 --> 0:01:01.720 somebody who's built multiple businesses and had multiple exits, I've 0:01:01.800 --> 0:01:03.600 learned the real world and when I break these down 0:01:03.600 --> 0:01:03.720 to you. 0:01:03.800 --> 0:01:05.240 It's going to make perfect sense. 0:01:05.600 --> 0:01:07.279 And I just want to let you know that again, 0:01:07.440 --> 0:01:10.000 in theory, it sounds good, but the real world is 0:01:10.240 --> 0:01:13.839 much more complex. Anyway, Let's jump right in the consumer 0:01:13.920 --> 0:01:16.960 price myth. So you've been told mainstream media is telling 0:01:17.000 --> 0:01:20.680 you that if tariffs, if the US puts tariffs in place, 0:01:20.959 --> 0:01:23.360 then you, the consumer will pay more, and they say 0:01:23.400 --> 0:01:26.960 it's basically a hidden tax. It's like increasing taxes. So 0:01:26.959 --> 0:01:29.480 Trump says he's going to lower taxes, but tariffs, now 0:01:29.480 --> 0:01:30.520 that's a hidden tax. 0:01:30.600 --> 0:01:30.880 Okay. 0:01:31.000 --> 0:01:33.680 Number one. Again, the consumer is the one that's gonna 0:01:33.680 --> 0:01:36.000 pay this. They're going to pay more. And they tell 0:01:36.080 --> 0:01:38.319 us that because you're going to have to pay more 0:01:38.360 --> 0:01:41.640 for prices for goods and services, then that's also going 0:01:41.680 --> 0:01:42.480 to cause inflation. 0:01:42.680 --> 0:01:43.840 Prices will be going up. 0:01:44.200 --> 0:01:46.640 I listened to Scott Pssent, the Treasury Secretary, on an 0:01:46.640 --> 0:01:48.800 interview I believe with Tucker Carlson, and he said that 0:01:49.240 --> 0:01:52.800 if the consumer is going to pay the increase, then 0:01:52.880 --> 0:01:57.720 why are other nations so worried about it? Interesting perspective 0:01:57.760 --> 0:01:59.640 again from somebody who knows how to make money. Let's 0:01:59.640 --> 0:02:03.040 break this down how this really works in the real world. So, 0:02:03.440 --> 0:02:07.240 first of all, when we talk about tariffs, there's three 0:02:07.280 --> 0:02:12.160 parties involved. First, you have the exporter. Okay, so this 0:02:12.200 --> 0:02:15.200 is the exporter, maybe the producer, if you will. So 0:02:15.280 --> 0:02:17.880 goods are being made in another country in China, and 0:02:17.919 --> 0:02:21.799 they're exporting them. They're exporting them over to America. Let's 0:02:21.800 --> 0:02:24.640 say they're going to increase tariffs. But really the importer 0:02:26.200 --> 0:02:31.240 or retailer would be Walmart, right, So China exports to Walmart. 0:02:31.320 --> 0:02:34.480 And then the third party in this is this is you, 0:02:35.080 --> 0:02:38.840 the consumer. So there's three people in this chain. So 0:02:40.200 --> 0:02:42.680 the United States, one of the new Trump policies, we're 0:02:42.680 --> 0:02:45.960 going to add tariffs. We're going to add ten percent 0:02:46.160 --> 0:02:47.960 on China, now whatever one hundred and twenty five percent. 0:02:48.080 --> 0:02:51.000 We're going to increase tariffs. First of all, where does 0:02:51.000 --> 0:02:53.920 that get paid? Who pays it? Well, the person that 0:02:53.919 --> 0:02:57.640 pays it is the importer. So Walmart or whoever imports 0:02:57.639 --> 0:03:00.640 this is going to have to pay that new percentage 0:03:00.639 --> 0:03:03.840 of imports to the US, not the exporter, not China, 0:03:04.560 --> 0:03:05.519 not you the consumer. 0:03:05.760 --> 0:03:06.600 They have to pay it. 0:03:06.960 --> 0:03:11.240 However, this is where free markets and capitalism and business 0:03:11.240 --> 0:03:13.520 one oh one gets a little bit into the details. 0:03:13.560 --> 0:03:15.760 So Walmart has to pay the United States. 0:03:15.440 --> 0:03:18.720 But they can't afford to pay an extra twenty percent 0:03:18.840 --> 0:03:20.120 or forty percent. 0:03:20.120 --> 0:03:20.680 They can't do that. 0:03:21.120 --> 0:03:23.000 So who's gonna pay it? Well, it's going to be 0:03:23.080 --> 0:03:27.320 split between these three parties. So what mainstream media wants 0:03:27.320 --> 0:03:29.760 to fearmonger you and say that you are going to 0:03:29.840 --> 0:03:32.440 pay all of that increase, that's not the case. As 0:03:32.480 --> 0:03:34.280 a matter of fact, you're probably not gonna pay any 0:03:34.280 --> 0:03:36.880 of it. So this difference, the ten twenty whatever the 0:03:36.880 --> 0:03:38.960 tariffs are gonna be, are gonna be split here. So 0:03:39.000 --> 0:03:40.960 what Walmart's gonna do is they're going to push this 0:03:41.200 --> 0:03:44.040 back back to the exporting country. This is why the 0:03:44.080 --> 0:03:46.400 countries don't want it. So Walmart says like, hey, I 0:03:46.440 --> 0:03:48.880 don't have that in my margin. I don't have that 0:03:48.920 --> 0:03:52.400 amount of money. So you, the producer exporter, are going 0:03:52.440 --> 0:03:54.840 to have to lower your prices. You're gonna have to 0:03:54.880 --> 0:03:58.080 lower your prices down to offset that, and then the 0:03:58.120 --> 0:04:01.320 producer is going to push that down the supply chain. 0:04:01.480 --> 0:04:04.360 So all the way down from the raw materials to 0:04:04.400 --> 0:04:08.840 the commodities to the labor, everybody gets squeezed to change 0:04:08.840 --> 0:04:12.120 this amount here. Now they're going to eat some of it, 0:04:12.680 --> 0:04:14.360 push it all the way back backwards. 0:04:15.640 --> 0:04:17.120 They're gonna eat some of. 0:04:17.080 --> 0:04:19.880 It, but the consumer is most likely not gonna eat 0:04:19.920 --> 0:04:22.599 any of it. Why is that, Well, if Walmart could 0:04:22.640 --> 0:04:25.480 just raise its prices by ten or twenty or fifty percent, 0:04:25.880 --> 0:04:29.760 they would, but they can't. Obviously, you I, the consumer, 0:04:29.839 --> 0:04:31.720 we can't afford to pay that increase. They would have 0:04:31.760 --> 0:04:34.640 already done that. The consumer, especially today, it's already stressed 0:04:34.680 --> 0:04:37.800 for really thin and so the price here, if any 0:04:37.839 --> 0:04:40.840 increase that all will be very minimal. Only what could 0:04:40.839 --> 0:04:44.400 be managed and afforded. All of the rest is going 0:04:44.480 --> 0:04:47.440 to be pushed back down, which is why China doesn't 0:04:47.440 --> 0:04:49.760 want it. So it's not an increase on you the consumer. 0:04:50.480 --> 0:04:53.000 It's not going to cause inflation like they say it is. 0:04:53.320 --> 0:04:56.279 What it is is going to affect the manufacturing nations, 0:04:56.480 --> 0:04:58.000 which is why they don't want it. All Right, The 0:04:58.000 --> 0:05:00.719 next one we're going to talk about is the retaliate myth. 0:05:00.960 --> 0:05:02.680 Now real quickly, I do want to just say, you know, 0:05:02.720 --> 0:05:07.200 one thing that's not being tariff technology Right. Technology moves 0:05:07.240 --> 0:05:10.640 around the world, and we are witnessing the largest explosion 0:05:10.680 --> 0:05:13.040 of technology in the world the world's ever seen. Is 0:05:13.040 --> 0:05:15.279 a fifty year cycles happening for the six time in 0:05:15.320 --> 0:05:17.159 three hundred years, and it gives us a blueprint to 0:05:17.200 --> 0:05:21.200 invest into the convergence of AI, robotics, autonomous vehicles, Bitcoin, 0:05:21.520 --> 0:05:22.920 and so much more. I'm going to do a whole 0:05:22.960 --> 0:05:25.279 workshop on this and show you this exact blueprint and 0:05:25.279 --> 0:05:27.599 what I'm buying so we can all make money. 0:05:27.800 --> 0:05:29.760 There's a link down below. It's all free coming out. 0:05:29.800 --> 0:05:31.960 We'll go through all the charts, I'll answer all your 0:05:32.000 --> 0:05:34.000 questions lives so you can apply it to your own portfolio. 0:05:34.200 --> 0:05:35.760 It's all free. Like I said, there's a link down below. 0:05:35.839 --> 0:05:39.559 But let's figure out why retaliation is really a myth. 0:05:39.920 --> 0:05:43.080 And so this is like, why would you antagonize China? 0:05:43.320 --> 0:05:45.840 Don't you know that they could start war with us 0:05:45.839 --> 0:05:47.360 and we can't go to war, or they may invade 0:05:47.400 --> 0:05:50.560 Taiwan or all these different things, So why would we retaliate? 0:05:50.720 --> 0:05:52.960 And so that's a big myth that China is going 0:05:52.960 --> 0:05:54.960 to retaliate and that we're going to take this from 0:05:55.040 --> 0:05:59.160 this trade war and potentially turn it into a real war, 0:05:59.600 --> 0:06:00.200 a cold. 0:06:00.080 --> 0:06:01.599 War to a hot war, if you will. 0:06:01.800 --> 0:06:07.840 However, in the real world where real economic decisions matter, well, 0:06:08.120 --> 0:06:12.000 what you'll find out is that strategic thinking are much 0:06:12.040 --> 0:06:17.839 more powerful and more important than emotional You see in theory, 0:06:18.040 --> 0:06:20.400 I guess that makes sense. But in the real world, 0:06:20.560 --> 0:06:23.719 if I act emotionally, I put people at risk, I 0:06:23.720 --> 0:06:25.719 put my country at risk, I put my legacy at risk. 0:06:25.880 --> 0:06:28.800 And so what I find is that cooler heads prevail 0:06:28.960 --> 0:06:31.800 and we think through strategy over emotion. Let me give 0:06:31.800 --> 0:06:34.280 you an example of what I'm talking about. So let's 0:06:34.320 --> 0:06:37.280 say that here we have the two nations battling out 0:06:37.360 --> 0:06:41.200 right now, China and America. Right here now, America wants 0:06:41.240 --> 0:06:45.240 to impose terrafts on China. Well, China and America both 0:06:45.320 --> 0:06:48.000 have strategic things they can do. Sure, they could just 0:06:48.040 --> 0:06:50.719 retaliate and start war. Why would they do that? So 0:06:50.800 --> 0:06:53.200 they have levers, like, well, they could impose tariffs back 0:06:53.360 --> 0:06:54.040 China's done that. 0:06:54.320 --> 0:06:55.840 They could manipulate. 0:06:55.360 --> 0:07:00.039 Their currency, lower their currency to offset those tariffs, which. 0:06:59.880 --> 0:07:00.799 Is what the US wants. 0:07:01.000 --> 0:07:04.520 They could use things like rare earth elements, things the 0:07:04.640 --> 0:07:08.520 US really needs, but China produces as leverage to offset that, 0:07:08.839 --> 0:07:12.000 they can use diplomacy, they could try and come and 0:07:12.040 --> 0:07:14.760 talk about this. The US also has levers, so that's 0:07:14.800 --> 0:07:17.080 the tariffs that have already been put on. The US 0:07:17.120 --> 0:07:20.320 can do sanctions because it controls the global monetary system. 0:07:20.360 --> 0:07:21.280 They can do sanctions. 0:07:21.840 --> 0:07:24.679 They can restrict technologies what the US has been doing, 0:07:24.880 --> 0:07:27.520 restrict how much advanced chips that China can have, things 0:07:27.560 --> 0:07:29.760 like that, and then they can restrict exports back the 0:07:29.760 --> 0:07:32.200 other way. So there's lots of levers that can be 0:07:32.280 --> 0:07:35.080 done without going to war. And if you think about it, 0:07:35.120 --> 0:07:37.040 here's what would happen. So when you have to make 0:07:37.080 --> 0:07:40.280 a decision, you know that in the real world there's 0:07:40.280 --> 0:07:41.400 no black and white. 0:07:41.680 --> 0:07:42.760 We have trade offs. 0:07:42.760 --> 0:07:44.400 So what we typically want to do is you'd see 0:07:44.400 --> 0:07:45.640 like a decision tree. 0:07:45.960 --> 0:07:48.560 So the US imposes. 0:07:48.080 --> 0:07:51.480 Tariffs on China, what's China going to do? Well, they 0:07:51.480 --> 0:07:57.560 have two options. Number one, they could retaliate. Option two 0:07:58.680 --> 0:08:02.440 they could adapt. And the way these options, should we 0:08:02.520 --> 0:08:05.040 retaliate and start war or should we just adapt and 0:08:05.080 --> 0:08:08.200 pivot to these So would retaliate be well, if we retaliate, 0:08:08.600 --> 0:08:11.000 we're going to hurt ourselves even worse. I mean people 0:08:11.000 --> 0:08:12.560 could die, We're going to spend a lot of money, 0:08:12.880 --> 0:08:16.080 but we also hurt our own exports. That means not 0:08:16.120 --> 0:08:18.200 only are we hurting our people in our military, but 0:08:18.240 --> 0:08:20.760 we're crushing our economy. At the same time, we risk 0:08:21.040 --> 0:08:23.200 consumer prices going up. So there's a lot of risk 0:08:23.240 --> 0:08:24.840 if we retaliate. Do we really want to do that? 0:08:25.080 --> 0:08:28.280 Why don't we think about what about adapting? Well, we 0:08:28.320 --> 0:08:31.960 could just subsidize our exports, which is what China has 0:08:31.960 --> 0:08:35.800 been doing for a long time. We could find alternative buyers. 0:08:36.080 --> 0:08:38.200 And as a matter of fact, this is basically what 0:08:38.320 --> 0:08:40.840 happens in the first round of Trump tariffs back in 0:08:40.840 --> 0:08:46.040 twenty eighteen. China said, fine, we're going to retaliate, and 0:08:46.120 --> 0:08:47.920 so what we're going to do is we're not going 0:08:48.000 --> 0:08:49.880 to buy American soybeans anymore. 0:08:51.160 --> 0:08:53.120 Big deal. Now, it was a big deal in the beginning. 0:08:53.160 --> 0:08:55.360 The US suffered, right, I mean, we had farmers that 0:08:55.400 --> 0:08:57.440 need to sell the soybeans. But the US could have 0:08:57.520 --> 0:09:01.040 retaliated back, but instead that you went down the adapt 0:09:01.120 --> 0:09:03.960 route and they found European. 0:09:03.400 --> 0:09:04.880 Buyers to buy the soybeans. 0:09:05.160 --> 0:09:07.959 So today the soybeans from America are still being sold, 0:09:08.040 --> 0:09:10.720 just to a different buyer. China instead of buying from 0:09:10.720 --> 0:09:12.680 the US, went I think to Brazil to buy them, 0:09:13.000 --> 0:09:16.040 and so things adapt. This is a moving market. The 0:09:16.080 --> 0:09:19.520 world changes and adapts and people sure certainly could go 0:09:19.559 --> 0:09:22.480 to war over it, but cooler heads typically would prevail 0:09:22.520 --> 0:09:27.480 and strategically, we just adapt instead of retaliated and going 0:09:27.520 --> 0:09:30.400 to war. If China wants to go get Taiwan over this, 0:09:30.720 --> 0:09:33.800 it's not about a ten or twenty percent tariff. They 0:09:33.840 --> 0:09:36.520 want Taiwan, right, it's a bigger deal, all right, Okay, 0:09:36.640 --> 0:09:39.400 myth number three is the comparative myth. 0:09:39.640 --> 0:09:39.920 All right. 0:09:39.960 --> 0:09:43.880 Now, this one again is really baked in school room theory. 0:09:44.200 --> 0:09:48.320 And so in economics one o one they're telling you 0:09:48.760 --> 0:09:52.640 that each country should specialize. And this is sort of 0:09:52.640 --> 0:09:54.400 like capitalism. So instead of to be growing my own 0:09:54.440 --> 0:09:56.320 food and building my house and making my own clothes, 0:09:56.520 --> 0:09:58.280 let me just build the house, you grow the food, 0:09:58.280 --> 0:10:01.440 and you make the clothes specially, and that's great, and 0:10:01.440 --> 0:10:04.920 that's what free markets are built around. However, in economics 0:10:04.960 --> 0:10:09.000 one to one they say that globalism should expand into 0:10:09.040 --> 0:10:14.439 that wherein each country specializes. A small business owner, are 0:10:14.480 --> 0:10:17.280 you buried in all types of work keeping you from 0:10:17.400 --> 0:10:19.959 the real thing that makes you money. Well that's where 0:10:20.080 --> 0:10:22.160 just Works comes in. 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Again that's Just Works dot com slash podcast. 0:11:04.679 --> 0:11:07.600 So this country's really good at growing wheat, this country's 0:11:07.600 --> 0:11:10.200 really good at growing mangoes, this country's really good at 0:11:10.280 --> 0:11:11.960 pulling you know, minerals out of the ground. 0:11:12.200 --> 0:11:14.280 And this country's really good at making weapons. 0:11:15.200 --> 0:11:18.440 Right, and so in that free trade would always win. 0:11:18.559 --> 0:11:22.920 But again that's baked in theory and ultimately false assumptions. 0:11:22.960 --> 0:11:24.000 Let me break that down for you. 0:11:24.160 --> 0:11:29.240 Okay, So in a classic free trade frame, what you 0:11:29.240 --> 0:11:31.880 would have is one country there's really good at raising 0:11:31.960 --> 0:11:35.360 sheep and they make a lot of wool. Then we 0:11:35.400 --> 0:11:38.600 have country too, they're really good at growing grapes, and 0:11:38.600 --> 0:11:41.560 making wine, so country too, you just make the wine, 0:11:41.760 --> 0:11:44.160 and country one you just make the wool, and we'll 0:11:44.200 --> 0:11:48.520 just trade wool for wine. Well that's a classic frame, 0:11:48.600 --> 0:11:50.840 and that is again baked in theory. But in the 0:11:50.880 --> 0:11:53.600 real world it's a little bit different. So let me 0:11:53.640 --> 0:11:55.760 tell you. So the real world we saw like in 0:11:55.840 --> 0:12:01.400 nineteen ninety Taiwan had some computers. Now and now today 0:12:01.600 --> 0:12:04.880 Taiwan has microchips some of the best in the world, right, 0:12:04.920 --> 0:12:06.840 and so they've changed. So what are we talking about. 0:12:06.840 --> 0:12:10.800 We're talking about the difference of a comparative advantage somebody 0:12:10.800 --> 0:12:15.640 makes wool, somebody makes wine, versus a strategic advantage. 0:12:15.720 --> 0:12:16.760 So what are you talking about. 0:12:16.760 --> 0:12:18.679 A comparative advantage would be just do what you're good at, 0:12:18.880 --> 0:12:21.640 make the wool, make the wine. A strategic advantage is 0:12:21.679 --> 0:12:24.679 build what you need to be good at, not what 0:12:24.720 --> 0:12:27.240 you're good at, what you need to be good at. 0:12:27.280 --> 0:12:29.160 So I might be really good at wool, but we 0:12:29.240 --> 0:12:32.360 might also need weapons. I might really be good at wine, 0:12:32.360 --> 0:12:36.080 but we probably need some manufacturing or industrial base as well. 0:12:37.240 --> 0:12:39.880 In a comparative advantage, it thinks about things statically, like 0:12:39.960 --> 0:12:42.480 economies just stay the same forever, like just make the 0:12:42.480 --> 0:12:45.680 wool for all of eternity will always be necessary versus. 0:12:45.679 --> 0:12:48.920 A strategic advantage understands that we're in a dynamic economy 0:12:48.920 --> 0:12:52.000 and things change and technology change and people change. But 0:12:52.040 --> 0:12:55.000 also what happens is economies changed. So when you start 0:12:55.040 --> 0:12:57.160 at the bottom, So some of the Asian countries that 0:12:57.200 --> 0:12:59.680 are just now getting manufacturing at the bottom, some people 0:12:59.720 --> 0:13:02.679 might say, oh, that slave labor. Well yeah, I mean 0:13:02.880 --> 0:13:05.640 it's like bottom level labor, and economies have to grow 0:13:05.679 --> 0:13:07.199 their way out of it. One hundred years ago, the 0:13:07.320 --> 0:13:09.440 US basically had that same slave labor as. 0:13:09.360 --> 0:13:11.679 Well, making the clothes, making the textiles. 0:13:11.840 --> 0:13:14.640 Now it's over in Asia, but each country grows out 0:13:14.679 --> 0:13:17.120 of it, sort of like what happened with Taiwan. They 0:13:17.160 --> 0:13:20.000 grew out of it. So it's not a static economist. 0:13:20.000 --> 0:13:23.640 The dynamic coming number two or three. Comparative advantages based 0:13:23.640 --> 0:13:25.040 on past efficiencies. 0:13:25.080 --> 0:13:26.200 I used to be. 0:13:26.080 --> 0:13:29.720 Really good at wool or wine or growing wheat. But 0:13:30.120 --> 0:13:33.439 a strategic advantage is based on future potential. I see 0:13:33.480 --> 0:13:36.760 the world is changing this way, we should be really 0:13:36.800 --> 0:13:40.599 good at that. I see that potentially our security is 0:13:40.640 --> 0:13:42.440 going to be threatened. We should think about building up 0:13:42.480 --> 0:13:45.320 our military or in the case of Taiwan, we see 0:13:45.440 --> 0:13:47.960 technology growing, maybe we should get really good at microchips. 0:13:48.000 --> 0:13:49.800 As a matter of fact, that's the story of Taiwan. 0:13:50.040 --> 0:13:54.720 Taiwan wasn't good at making microchips, but they decided that 0:13:54.800 --> 0:13:57.880 they should get good at making microchips. They decided to 0:13:58.120 --> 0:14:00.559 build plants to do that when they had no experience 0:14:00.600 --> 0:14:02.120 doing that, and now they're. 0:14:02.000 --> 0:14:03.199 Some of the best in the very world. 0:14:04.120 --> 0:14:07.160 So instead of wool and wine, think about semiconductors and 0:14:07.200 --> 0:14:10.400 ai moving to what is going to be It's dynamic. 0:14:10.520 --> 0:14:13.079 The world changes, the shifts. Great nations don't just trade 0:14:13.120 --> 0:14:18.280 their strengths, David, they develop new ones all right. Now 0:14:18.360 --> 0:14:20.880 on the next myth, this is the reshoring myth. So 0:14:21.160 --> 0:14:23.680 what you hear is that you know, part of this 0:14:23.760 --> 0:14:26.800 whole tariff strategy that's sort of the leverage layer one. 0:14:27.040 --> 0:14:31.200 Really it's about bringing manufacturing back to the US, reindustrializing, 0:14:31.280 --> 0:14:33.560 So bringing manufacturing back to the United States. 0:14:34.040 --> 0:14:35.800 And so the myth is that we'll. 0:14:35.600 --> 0:14:38.920 Shoot, everything's going to get more expensive then, right, because 0:14:38.960 --> 0:14:41.520 i mean, shoot, you make stuff in Asia or China 0:14:41.960 --> 0:14:45.560 where labor is really cheap, and then you make it 0:14:45.600 --> 0:14:49.120 in the United States where labor is really expensive. Of course, 0:14:49.160 --> 0:14:51.760 it has to bring prices back up, right, of course 0:14:51.800 --> 0:14:55.560 it has to. And again that's based in theory. It's 0:14:55.600 --> 0:14:57.960 not based in the real world. And any business owner 0:14:58.120 --> 0:15:01.440 understands this. This is a one D argument in a 0:15:01.760 --> 0:15:04.200 four D multi dimension world. 0:15:04.440 --> 0:15:05.360 Let me explain what. 0:15:05.320 --> 0:15:08.600 I'm talking about here, okay, So let's just look at 0:15:08.640 --> 0:15:13.920 like automobiles, for example, the auto worker labor is what 0:15:13.960 --> 0:15:14.640 they're talking about. 0:15:14.760 --> 0:15:18.040 Hey, in China, it's five to ten dollars. 0:15:18.120 --> 0:15:20.880 Is what an auto worker makes in China, five to 0:15:20.920 --> 0:15:25.560 ten dollars an hour. In America, that same workers sixteen 0:15:25.640 --> 0:15:28.520 to twenty nine dollars. So obviously if I have to 0:15:28.520 --> 0:15:31.400 pay twenty nine dollars instead of five to ten dollars, 0:15:31.560 --> 0:15:36.160 it's going to increase my costs. Okay. Well, again, a 0:15:36.160 --> 0:15:41.000 business owner understands that labor is just one piece of 0:15:41.040 --> 0:15:43.440 the entire total product costs. 0:15:43.520 --> 0:15:46.280 So we have design, so it's to design how much 0:15:46.320 --> 0:15:46.840 we pay them. 0:15:47.080 --> 0:15:49.840 We have logistics, how do we get all the raw 0:15:49.920 --> 0:15:52.520 materials and all the pieces and all of that moving around, 0:15:52.760 --> 0:15:54.680 the shipping costs and now the cars have to be 0:15:54.720 --> 0:15:56.640 shipped over to the United States. 0:15:56.760 --> 0:15:58.160 We have the energy inputs. 0:15:58.160 --> 0:15:59.920 So one of the Trump's things is to get in 0:16:00.040 --> 0:16:02.360 energy down really low, whereas like in Germany the automobiles, 0:16:02.560 --> 0:16:04.640 energy has gotten so high that a lot of German 0:16:04.680 --> 0:16:07.120 autos are now being built in other European countries where 0:16:07.200 --> 0:16:10.080 energy is lower. There's quality and waste. We know that 0:16:10.200 --> 0:16:13.440 to German quality is really good. Chinese quality, typathy isn't. 0:16:13.440 --> 0:16:15.760 So there's a lot of waste that's accounted for that. 0:16:16.000 --> 0:16:19.440 Then we have labor, and then we have time. So 0:16:19.600 --> 0:16:21.920 how long does it take to get the stuff over there? 0:16:21.920 --> 0:16:23.400 And how long does it take to make it? And 0:16:23.440 --> 0:16:24.800 how long does it take to get over here. Let 0:16:24.840 --> 0:16:28.360 me give you an example. Right now, Mexico is becoming 0:16:28.400 --> 0:16:31.680 one of the powerhouses in the world for manufacturing. A 0:16:31.680 --> 0:16:34.000 lot of manufacturing that was happening in Asia is being 0:16:34.000 --> 0:16:34.880 coming to Mexico. 0:16:35.040 --> 0:16:35.320 Now. 0:16:35.760 --> 0:16:40.160 Labor in Mexico is more expensive than labor in Asia. However, 0:16:40.840 --> 0:16:44.760 the Mexican workers are a lot more efficient, meaning they 0:16:44.800 --> 0:16:47.280 can get a lot more done with a lot less time. 0:16:47.680 --> 0:16:51.280 So if a worker, let's just say hypothetically, was making 0:16:51.320 --> 0:16:54.360 two dollars an hour and it took them ten hours 0:16:54.400 --> 0:16:58.000 to produce a good, that would be twenty dollars, right 0:16:58.400 --> 0:17:01.120 but let's say another worker is being paid ten dollars 0:17:01.160 --> 0:17:04.080 an hour, but it takes them only two hours to 0:17:04.119 --> 0:17:08.040 get it done, that's still only twenty dollars. So it's 0:17:08.080 --> 0:17:11.719 not the price of the labor, it's the efficiency. But 0:17:11.840 --> 0:17:14.760 not just the efficiency of the labor. All of these 0:17:14.800 --> 0:17:17.280 other things, the quality of the waste, the inputs of 0:17:17.320 --> 0:17:20.399 the energy, the shipping cost, the logistics in all of 0:17:20.400 --> 0:17:23.320 that is a very complex thing. This is why in 0:17:23.440 --> 0:17:25.600 theory it sounds like it makes sense. So we have 0:17:26.000 --> 0:17:27.960 labor in China, it's cheap. 0:17:28.119 --> 0:17:29.359 In the US it's higher. 0:17:29.520 --> 0:17:33.359 Certainly, shipping and from China to the US is expensive 0:17:33.760 --> 0:17:34.200 in the US. 0:17:34.240 --> 0:17:35.600 It is local risk. 0:17:36.240 --> 0:17:39.720 Well, there's geopolitical risk in China. We saw that with 0:17:39.760 --> 0:17:42.080 Apple where Apples also having to move their plants over 0:17:42.119 --> 0:17:44.800 to India because there's geopolitical risk. In the US, it's 0:17:44.840 --> 0:17:48.480 stable automation in China, it's lower in the US. There's 0:17:48.520 --> 0:17:51.720 advance quality inconsistent in China, US higher. 0:17:51.760 --> 0:17:52.720 Now we could argue each one. 0:17:52.640 --> 0:17:54.199 Of these and what product we're talking about, but you 0:17:54.240 --> 0:17:58.000 get the idea. We're trying to break the myth here. Again, 0:17:58.040 --> 0:18:01.800 in theory, it sounds logical. Are reasonable in the real world. 0:18:01.800 --> 0:18:03.959 If you're a business owner, you know that it doesn't 0:18:03.960 --> 0:18:06.440 make sense. And so it's certainly possible that the US 0:18:06.480 --> 0:18:12.160 could reinshore a lot of things, use automation, become more 0:18:12.160 --> 0:18:15.440 efficient and save in a lot of areas, and potentially 0:18:15.480 --> 0:18:18.719 match the cost, potentially even bring the cost down. Okay, 0:18:19.600 --> 0:18:23.960 the next myth is that tariffs equal isolation. Terriffs are 0:18:24.040 --> 0:18:26.800 anti trade. Terrafts are anti globalism. That means that you 0:18:26.800 --> 0:18:28.840 don't want to participate in the world and you want to. 0:18:28.840 --> 0:18:29.680 Be an island. 0:18:29.880 --> 0:18:37.000 Well maybe maybe not again, maybe that's oversimplified. Tools, trade 0:18:37.280 --> 0:18:40.960 or terrifts protectionism are greater than building up walls. 0:18:40.960 --> 0:18:42.080 So it's not about walls. 0:18:42.280 --> 0:18:46.720 It's about tools and strategically using tools. So countries want 0:18:46.760 --> 0:18:50.400 to use these tools because it's how you adapt, it's 0:18:50.440 --> 0:18:54.840 how you can grow, and so these tools, TIFFs, walls 0:18:55.560 --> 0:18:56.360 are a tool that. 0:18:56.320 --> 0:19:00.000 Can be used to buy time. This is what America is. 0:19:00.400 --> 0:19:03.960 This is exactly how America grew When America broke off 0:19:03.960 --> 0:19:04.640 from Europe. 0:19:04.800 --> 0:19:08.080 Europe was much more advanced. Europe could make everything faster 0:19:08.200 --> 0:19:09.040 and cheaper. 0:19:08.800 --> 0:19:11.720 Right, So the US had to put tariffs in place 0:19:12.080 --> 0:19:15.920 to protect the economy. So it could grow to then 0:19:16.119 --> 0:19:19.199 outpacing the European economy right as it happened, but it 0:19:19.280 --> 0:19:22.600